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CU SIP investments excluded from fidelity bond calculations
ALEXANDRIA, Va. (5/22/09)—Credit unions may now exclude from their total assets, for purposes of calculating minimum fidelity bond coverage, any outstanding investments in the Credit Union System Investment Program (CU SIP). Under CU SIP, the NCUA's Central Liquidity Facility (CLF) makes a secured, one-year advance to the natural person credit union. The credit union must concurrently invest the amount of the advance in a fixed-rate, matched-term, guaranteed note that is issued by the participating corporate credit unions. Corporate credit unions use the funds to retire borrowings from outside the credit union system. The NCUA has been working to remove impediments to participation in the program. By approving an “order to exclude” at its open board meeting Thursday, the NCUA board changed part of rule 12 C.F.R. §713.5, which set the requirement for minimum fidelity bond coverage. The waiver specifically states that all other provisions of the regulation “shall remain in effect and unchanged.” Use the resource link below to read the board action memorandum.
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